Wednesday, 7 March 2012

March 6 - more meetings in Washington DC

White House
Today was full on meetings - 8 presentations, but very informative.
We learnt lots about the Farm Bill. It is an instrument used to determine investment in Welfare, Environment and Agriculture. In brief, the USDA through the Farm Bill, spend about $93 billon p.a. although this next bill is under pressure to reduce because of the national debt situation.
Thomas Jefferson memorial
Of this Farm Bill about 75-80% is spent on food and nutrition mostly in the form of food stamps which are distributed to low income families. These food stamps are used to buy food from supermarkets (no alcohol or tobacco). This portion of the budget is increasing due to the rise in unemployment following the global financial collapse.

Crop insurance is an interesting concept for Australian farmers to get their heads around. There has been a move away from direct subsidy payments being made to farmers as this is seen to be trade distorting in world trade negotiations. However, payments made by government to private insurance companies for crop insurance are not considered to be trade distorting through the eyes of the World Trade Organisation. How it works is that private insurance companies not only insure against crop losses from weather events but also from losses associated with low commodity prices - essentially providing payment if market prices drop. The government pay approx. 40% of farmers premiums plus the insurance companies office expenses, plus insurance commissions. Very interesting. That's one method of increasing domestic food security.
Also heard from a top agricultural lawyer who defends farmers. He gave an interesting insight into the amount of litigation taking place against farmers in the USA. There is pressure being applied from environmental groups, animal rights movements, water quality organisations, organic farmers and anti GM activists. His views were that these groups are well funded and have political support, and given that farmers represent only a small % of the population and support for environmental factors are growing, this threatens the future of primary production in the USA and this effect is likely to occur in Australia in coming years.
Abraham Lincoln memorial
Had discussions with the vice president of the USA Wheat Association marketing dept. He gave us an overview of world markets for wheat sales and trends in production.
Also had a presentation from manager of international affairs for John Deere (tractor manufacturers) They have an aggressive target of doubling their turnover from 25 to 50 billion $US p.a. To achieve this they are looking to increase sales into developing countries and growing their construction machinery market share. They are also moving into irrigation supplies.
In the evening we went on a Washington DC lights tour. We boarded a bus and viewed most of DC's main attractions. It was very interesting but very cold.
Tomorrow we have the morning for free time and then we leave Washington DC behind and fly to Winnipeg, Canada. Will update blog when I can. Cheers.

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